Thoughts on reducing healthcare costs

On Tuesday the Bush administration released a report on the financial situations of two very important federal programs, Social Security and Medicare. The financial outlook for Medicare is particularly grim where funds for the program will be exhausted by 2019. Today’s article in the New York Times does a good job of reviewing the political implications. Healthcare has gotten a lot of play during the current political cycle and has led to particularly heated debates in the democratic primary. Without getting overly involved in political commentary, I will simply state that any policy needs to focus first on significantly lowering the costs of healthcare in this country before attempting to insure everyone. The system is built to withstand a modest number of uninsured patients but the current crisis is derived from the number of uninsured increasing rapidly due to out of control medical expenses.

In my experience the two mostly commonly quoted causes for the high cost of healthcare are medical malpractice and the cost of pharmaceuticals. These issues have been discussed at length. They have a significant impact on healthcare and need to be addressed. However, I see more significant factors ‘in the field’ and actually believe they are easy to address and would require jumping significantly fewer political hurdles. Obviously, since this is blog on the intersection of healthcare and technology I see this synergy as paramount to decreasing healthcare costs. It has been well documented the positive effects of technology through electronic medical records, electronic physician orders and electronic personal patient records. Each decreases medical mistakes and improves communication between healthcare professionals. The impact of decreasing medical mistakes on healthcare costs is intuitive, but improved communication has an even greater impact. Better communication leads to fewer mistakes, but also makes the system more efficient. As an example the patient with a medical emergency that has full and detailed records that are easily accessible will have their treatment expedited as time won’t be wasted gathering information from multiple unconnected sources. The impediment to progress in healthcare IT is not political, everyone agrees it is important and will eventual lower costs, in fact the president even briefly mentioned healthcare IT in his State of the Union address.

The issue slowing widespread adoption of technology in medicine is the initial cost and who is going to pay for it. The Medicare issue is at the crux of this problem, the government cannot afford to implement IT as it would cripple a program that is already on its last leg. Thus, the onus has fallen on the medical profession and particularly doctors. Problems arise as most doctors see patients in a small private practice. Expecting a small business such as a private practice to implement electronic medical records, or sophisticated IT tools that allow easy communication between an office, hospital and pharmacy is initially unrealistic if there is not an immediate return on investment (ROI) for the doctor. This is where IT tools such as SavvyDoc become the catalyst for integrating technology and healthcare as the doctor obtains an immediate ROI when creating a transparent appointment system. That ROI is realized by decreased patient no-shows as patients make appointments that fit their schedule or easily change an appointment as the patients situation dictates. Also, when doctors market open appointments those appointments are exponentially more likely to be filled. There are other farther reaching positive impacts of transparent appointments on the overflow situations we currently encounter in our emergency rooms but I will save that for a follow-up post. The major point is that as we watch these debates and develop our conclusions about the candidates and how they will or will not improve our healthcare system we cannot ignore the importance of healthcare IT. As a physician I have little to no influence as an individual on lowering costs by fighting the malpractice insurers or the pharmaceutical companies, but I can easily make the decision to embrace and implement technology.

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10 responses to “Thoughts on reducing healthcare costs

  1. Pingback: The Doctor’s dilemma to maintain a profitable practice «

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  6. The subject is complicated, but many of our most serious problems will go away if we provide an adequate primary care base of empowered family physicians and other primary care doctors, with a system that rewards them to provide the services of the personal medical home. This will of course include technology, but the central thesis is creating an environment that helps them to monitor their effectiveness and mange populations of patients.

  7. For those interested here is more information on the medical home Dr. Lynch is describing:

    http://www.ama-assn.org/ama/pub/category/17108.html

    I agree that the comprehensive care provided by the medical home will be important as we transition from disease-centered care to more patient-centered care. Understanding that my background is not in primary care, I would argue that implementing a system that creates more work for PCP’s when there is already a shortage is problematic. Which is why I have argued for rethinking the role of a PCP by further integrating with nursing specialists.

  8. Pingback: Further thoughts on reducing health care costs «

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